Hindustan Copper offer fully sold

Gets bids for 3,89,12,793 shares, higher than the projected 4% divestment in first tranche

India raised 6.1 billion rupees by selling 4% of state-run Hindustan Copper Ltd in a share auction on Friday, kickstarting a stalled divestment programme that is crucial to rein in a ballooning fiscal deficit.

The auction generated bids for 38.9 million shares, stock exchange data showed. The government had offered 37.01 million shares, or 4% of the company, but had the option to sell a further 51.71 million shares.

The bids came at a weighted average price of 156.81 rupees, stock exchange data showed, slightly above the 155 rupees floor price.

The government owns 99.59% of Hindustan Copper, and the limited free float had inflated the traded price of the shares. The stock fell about 20%, its daily limit, on Friday to 212.95 rupees.

State-run Life Insurance Corp of India and State Bank of India, Punjab National Bank were among the bigger buyers of shares, two sources directly involved with the process said, an indication of limited interest from private sector investors.

New Delhi aims to raise 300 billion rupees through share sales in state companies in the fiscal year ending in March, but has managed just 1.25 billion rupees so far, through an IPO by National Buildings Construction Corporation. Weak market conditions have deterred public issues or auctions.

The Indian government raised 140 billion rupees through share sales in the previous fiscal year, less than half its 400 billion rupee goal.

Earlier this month, the government pushed back a decision to sell a stake in state-run National Aluminium Co, in a deal that could have raised about $270 million. Last month, state steelmaker Rashtriya Ispat Nigam Ltd shelved an IPO due to disagreement with bankers over pricing, sources with direct knowledge of the matter said.

The government has lined up stake sales in miner NMDC Ltd and explorer Oil India before December 20, a government official said earlier this week.

Axis Capital, ICICI Securities, Kotak Securities, SBI Capital and UBS were the lead managers for the Hindustan Copper sale.